Hedging a cash commodity using a different but related futures contract when there is no futures contract for the cash commodity being hedged and the cash and futures market follow similar price trends (e.g., using soybean meal futures to hedge fish meal).

Source: National Futures Association; published here with permission. This publication (Glossary of Futures Terms - An Introduction to the Language of the Futures Industry) is the property of the National Futures Association.

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